We meet the British families who could lose their homes due to draconian laws
passing through parliament in Portugal

Edwina Luz, 26, and her family have owned their Portuguese property in Praia da Luz in the western Algarve since the Sixties.

Miss Luz, who is half Portuguese and half British, has a strong attachment to the place, which was originally bought by her grandparents because her grandfather suffered from tuberculosis and benefited from a warmer climate.

They bought a three-bedroom seaside cottage in 1963 from a local couple for around €1,200, lived there for many years and raised a family. In 2008 the property was passed down to Miss Luz's mother, aunt and uncle.

These family ties mean nothing, though, under draconian laws passing through parliament in Portugal.

British expats who own waterfront property in Portugal have been left in limbo as the country's government decides whether to water down plans that could see thousands lose their homes.

Local and foreign landowners must be able to produce documents that prove their property has been privately owned for at least 150 years under a law recently reinstated by the Portuguese government.

In 2005 policymakers revived the "water resources ownership" law which allows the state to reclaim land it deems to be public property. It is targeting properties built on valuable waterfront land that is within 50 metres of the ocean or 30 metres of other waterways such as lakes and rivers. The law aims to protect the natural environment around coastlines and waterways.

The government initially gave owners until January this year to produce documents proving their land had been privately owned since at least 1864. Landowners lobbied against the changes and last year the deadline was extended until July 1.

Many home owners argued that Portugal's land registry archives were not comprehensive and the necessary documents simply did not exist. They said the land registry approved their purchase of the land, so the government should not have the power to seize it.

The law allows the government to reclaim the land or impose additional taxes or a 30-year lease on landowners.

Last month politicians passed a number of amendments that could significantly relax the requirements. The majority of homes built before 1951, when licensing laws were introduced, may be exempt, as well as properties in urban areas and those not at risk of coastal erosion. The July 1 deadline may also be scrapped.

A committee of government officials met in Lisbon on Friday afternoon to finalise the amendments. However, no outcome has been announced, leaving property owners unsure of their next moves. The Telegraph understands an announcement could be due tomorrow (Wednesday), however this could be delayed.

Miss Luz, a trainee barrister, has helped her family search for the documents to prove the property is legally theirs but has not found them.

She has a certificate showing that most of the archives for the local area were destroyed in a fire in 1884, but she doubts this will help her family's case in the eyes of the courts.

"Even if we do find documents relating to our property there's no guarantee the court will accept them," Miss Luz said. "Many street names and house numbers have changed over the years as areas have been developed, so it is very difficult to find a clear paper trail.

"My family has a strong emotional attachment to our home. My grandparents invested in it because of my grandfather's tuberculosis – it was much better for him to be in Portugal than in the UK. The house holds lots of memories for us and it would be terrible if it was taken from us."

Jersey-born Paul Abbiati and his Portuguese wife Iva bought a seafront three-bedroom property for €150,000 in 2008 in the fishing village of Paul do Mar, on Madeira island.

His ownership papers were stamped by the land registry and a notary, acknowledging the sale was legal. However, last month he searched for documents proving that the land had been in private ownership since 1864.

"I, and other private home and landowners in the same situation, have spent hours and much money trying to discover documents proving private ownership in government archives, but it's impossible," he said.

"There are thousands of ordinary people affected by this, not just the wealthy.

There are local fishermen with houses dating back 300 years who are unable to find the documents they need."

He said he had complained to the European Commission, but was told he had to battle it out in the Portuguese legal system.

Is Portugal copying Spanish 'land grab'?

The situation in Portugal is being compared with Spain's notorious "land grab" law, under which hundreds of expatriate Britons lost homes on the Costa Blanca in the early 2000s.

Under a loophole in the law, known as the Ley Reguladora de la Actividad Urbanística (LRAU) and originally intended to speed up development on the Costa Blanca, developers could compulsorily purchase prime rural land by saying it was for urban development.

Developers made more than 20,000 compulsory purchases at fractions of the market value and many homes were demolished. In 2004 the European Parliament condemned the law and criticised apparent corruption among developers, officials and lawyers, but its call for a halt to the practice was ignored. In 2005 the European Commission stepped in and ordered Spain to resolve the situation.

Have you been affected by the new law in Portugal? Email nicole.blackmore@telegraph.co.uk